Partner Article

Plans for £1.2bn Business Finance Partnership revealed

The deputy Prime Minister has outlined plans for a £1.2 billion Business Finance Partnership (BFP), as part of the Government’s credit easing package.

The BFP proposals include allocating finance to senior loan funds, with £100 million earmarked to support non-bank lending channels such as peer-to-peer lending and mezzanine finance.

The Department of Business, Innovation and Skills will be responsible for distributing a proportion of this finance, which aims to increase the supply of capital through alternative channels.

It is hoped that the new programme will help to stimulate the development of deeper and more diversified non-bank lending market for UK businesses with a turnover of less than £500 million.

Nick Clegg expressed the hope that this would help to create more competition within the sector.

He commented: “The Coalition is going to invest directly in non-bank finance as part of our £1.2 billion Business Finance Partnership - £700 million will be invested through up to seven fund managers who will lend directly to British firms.

“There will be additional investment from the private sector with our share eventually returned to government.

Investments will now be made over the coming months, and the Government is now calling on the business community to tell them the ideal way to bypass the banks and unlock new channels of capital.

Business Secretary Vince Cable added “We need to reshape the UK’s finance landscape to better serve the needs of ordinary businesses, helping more companies find the support they need to start and grow.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .